P&Z Housing Calculation Hearing Tonight
Planning and Zoning Meeting
Affordable Housing Independent Calculation Request
Thursday, May 19, 2016, 5:30 PM, REBEKAH HALL, TELLURIDE, CO 113 WEST COLUMBIA AVENUE
P&Z Agenda Here // Full Packet Here
Dear Board Members,
Tonight is a meeting regarding the independent housing calculation we have requested in cooperation with Meriwether on the Warehouse Parcel. This is a request for special consideration of the Warehouse to get the PUD approved, and will be revisited once we have our interior design and know our final sq. ft.
We do anticipate requesting a full waiver of affordable housing based on "Historic Use", which is aligned with the Museum and Ah Haa School, and is logical for an historic structure of this kind.
from the memo:
"As a side note, other non-profits referenced above, like the Ah Haa School and the Telluride Historic Museum, were not subject to the affordable housing mitigation requirements because they moved in to structures that had a similar or more intense use previously. Redevelopment of a pre-existing use or a change of use that is less intensive does not trigger affordable housing mitigation requirements."
-----------The Staff Memo
Planning and Zoning Commission (P & Z) Michelle Haynes, Building and Planning Director May 19, 2016
RE: Consideration of an Independent Housing Mitigation Calculation pursuant to Land Use Code Section 3-720.C.2 for the proposed Transfer Warehouse Parcel rehabilitation and redevelopment as a Public Facility. This application is associated with a Large Scale Planned Unit Development, Large Scale Subdivision and Large Scale HARC application at 201 South Fir & 283 South Fir Street.
SUMMARY
Telluride Transfer Company, LLC, owner of the 1⁄2 block of South Fir, requests an independent calculation of affordable housing mitigation requirements based upon a development application before the Planning and Zoning Commission and the HARC that includes 201 S. Fir, also known as the Transfer Warehouse.
The Transfer Warehouse redevelopment and rehabilitation is a unique component of the subdivision and PUD application. The Land Use Code requires a 10% land dedication of the gross land area of the subdivision (29,375 gross square feet) which results in a land dedication of 2,938 square feet, “to the Town or other entity as determined by the Town Council to be used for public parks and recreation areas, open space, or municipal purposes requiring land.”
The land dedication proposal is subject to Town Council review and approval prior to a final plat for the property. The proposal for Town Council consideration is that the Transfer Warehouse Parcel would be deed restrict to a Public Facility and the Town would approve of an “other entity” namely, a local non-profit, who would own and operate the facility. The land dedication value is exempt from the transaction, however the Telluride Arts, a local non-profit organization, and the Telluride Transfer Company, LLC would agree to a value for the remainder of the deed restricted property and value of improvements associated with rehabilitation of this structure.
The applicants are meeting the affordable housing requirements for the free market portions of the proposed development which is occurring on the proposed Stronghouse Parcel. This application for an independent calculation is to address how the required affordable housing mitigation will be met on the proposed Transfer Warehouse parcel portion of the redevelopment plan. The applicant requests an independent calculation per LUC Section 3-720.C.2 different from the Land Use Code (LUC) requirements.
BACKGROUND
This request is limited to the Transfer Warehouse parcel portion of the proposed development. The applicant proposes to meet all required affordable housing mitigation for the free market portion of the development on the Stronghouse Parcel which will result in three onsite affordable housing units.
The Transfer Warehouse is a Contributing rated structure according to the 2013 Telluride Historic and Architectural Survey (2013 THAS). Pursuant to the PUD application, concurrent with the free market development of the remainder of the property, the Transfer Warehouse will be rehabilitated to a “warm, dark shell” which would include a roof, flooring, basic mechanical and utility connections, windows and doors. The “warm, dark shell” would receive a Certificate of Occupancy concurrent to or prior to a Certificate of Occupancy being granted for the free market portions of the proposed development project.
The “warm, dark shell” would create 6,200 square feet of Public Facility space. New or additional square footage, up to the 12 552 maximum square footage allowed pursuant to the proposed PUD, is subject to additional parking and affordable housing mitigation requirements.
AFFORDABLE HOUSING CALCULATION PURSUANT TO THE LAND USE CODE
The Land Use Code calculates the required affordable housing mitigation at 4.5 employees per 1,000 square feet of new Net Floor Area (as defined by Table #1 per 3- 720.C.1.a of the LUC).
This calculation is as follows:
The proposed “warm, dark shell” is 6,200 square feet of new Public Facility square footage for the purposes of calculating affordable housing mitigation.
The Land Use Code affordable housing mitigation calculation is as follows:
Per the Table at 3-720.C.1 6200/ 1000 = 6.2 x 4.5 = 27.9 number of employees generated
27.9 (employees generated) x 350 (sq. ft) x .40 (% mitigation) = 3906 square feet of affordable housing mitigation to be provided onsite.
3,906 square feet of housing mitigation required INDEPENDENT CALCULATION REQUEST
The applicant requests an independent calculation allowable pursuant to LUC 3-720.C.2.
The Telluride Arts currently occupies 2,318 square feet of space and that the existing employee ratio pursuant to the square footage of existing space equals
1 Full Time Equivalent Employee (FTE) per 1,000 net square feet of space – per narrative
Staff calculates this a 1 FTE per 772 square feet of space.
05 19 2016 independent calc p z transfer warehouse memo 2 of 7
The applicants note that the new space will be 6,200 square feet and states there will be no increase in staff so the FTE equivalent would result in .5 FTE per 1,000 net square feet of space in the Transfer Warehouse.
The request is to modify the Employee Generation Rate from the following to the following:
4.5 FTE’s per 1,000 square feet of Public Facility space (LUC requirement)
.5 FTE’s per 1,000 square feet of Public Facility space (independent calculation)
This calculation would result in the following:
6.2 x .5 = 3.1 Employees Generated based upon 6,200 square feet 3.1 x 350 x .40% = 434 square feet of required housing mitigation
This would modify the affordable housing requirement from 3,906 square feet of affordable housing to be to 434 square feet of affordable housing requirement. A requirement less than 500 square feet does not require an onsite unit to be construction and does allow the full amount to be bought out at the current mitigation rate of $228 a square foot.
This buy out would be required prior to issuance of a building permit for the project with a total value of $228 x 434 = $98,952. This payment is made into the affordable housing restricted fund.
Should the independent calculation as proposed be approved, the applicant also requests that with any future expansion in excess of 6,200 square feet, the employee generation rate of .5 apply to future onsite expansion. This can be written into the development agreement if the boards desire. The PUD seeks a maximum floor area for this parcel to be 12,552 square feet.
REVIEW CRITERIA
Land Use Code criteria is in bold.
3-720.B.1.
Independent Calculation. An applicant may submit an independent calculation of the number of employees to be generated by a proposed development, to be used in place of the employee generation requirements Table #1.
a. Approval Authority and Review Criteria. Approval of the results of the independent calculation shall be at the sole discretion of the Planning and Zoning Commission. (“P&Z”) Prior to approval of any Independent Calculation, the Telluride Housing Authority Subcommittee (“THA”) shall review the Independent Calculation and forward a recommendation to the P&Z. In determining whether approval of an independent calculation should be granted, the Commission shall consider the following criteria:
05 19 2016 independent calc p z transfer warehouse memo 3 of 7
(1) Data and records, including but not limited an independent pay roll audit, supporting employment generation for the proposed use. The Commission may employee, at the applicant's expense, a professional of the Commission's choosing to evaluate the independent calculation.
The data provided is found in the applicant’s narrative and supporting materials. What is stated is that there are currently 3 full time employees (FTE’s) and an existing square footage of 2,318 square feet of building occupied by Telluride Arts. The existing Employee Generation Rate is .8 for 1,000 square feet of space.
The applicants request that .5 be the value associated with the employee generation rate rather than 4.5 as required by the LUC. The applicant note specifically that they will be relocating the existing staff within an expanded space.
Should there be concern regarding resulting employees the Land Use Code does allow for an independent payroll audit that can be required as a condition of approval two years following a projects occupancy to determine if the number of the employees in the project corresponds with the applicant’s calculation. This could be a condition of approval and referenced as an additional condition in the recommended motion. This is a standard condition that has been applied to other independent calculations.
(2) Future changes in use for the property permitted by the underlying zoning and provisions of this Division.
Should the development applications be approved as presented, the property would be restricted in perpetuity to Public Facility use as defined by the Land Use Code. An additional requested allowable use is ancillary commercial use to provide a bar/café onsite leased to an existing independent contractor. This discussion is subject to the Transfer Warehouse Deed Restriction and Town Council approval.
(3) Actual employment rates of similar businesses and activities within the Telluride Region and other resort communities.
No equivalents were provided by the applicant. The applicants note that Art Space provides a detailed Sustainability Facilities Analysis and that this report would be available by the end of the year. It is not available with this application.
Staff reviewed business license information and requested information from the following comparable organizations for the following similar non-profits as a point of reference:
Telluride Historical Museum 1 FTE per 1000 square feet Ah Haa School
1 FTE per 1,000 square feet Telluride Arts
1 FTE per 800 square feet PROPOSED TELLURIDE ARTS .5 FTE per 1,000 square feet
5 FTE 5 FTE 3 FTE 3 FTE
5,200 square feet (estimate) 5,764 square feet (estimate) 2,318 square feet (estimated) 6,200 square feet (estimated)
The request for a .5 employee generation rate per 1,000 square feet of use appears to be slightly lower than existing similar non-profit uses.
05 19 2016 independent calc p z transfer warehouse memo 4 of 7
(4) Whether approval would be consistent with the intents and purposes of this Division and the Telluride Master Plan.
Affordable Housing Goal E. Policy 2. Maintain appropriate commercial, accommodations and residential mitigation rates for new development (2006 Telluride Master Plan, p. 20)
Commercial and Accommodations Land Use
Goal J: Ensure an adequate and well balanced supply of commercial facilities to serve the existing and proposed permanent and visitor population of the Telluride Region. (TMP, p.33)
Goal K: Maintain and improve the Commercial Core area of Telluride to promote a stronger capture of local and visitor population expenditures.
A Public Facility in this location is consistent with the above reference Master Plan goals and policies. An independent calculation is appropriate when an applicant has determined the existing employee generation rates are inconsistent with the number of employees otherwise required in the Land Use Code. Commercial and Public Facility uses share the same Generation Rate.
RECOMMENDATION FROM THE TELLURIDE HOUSING AUTHORITY (THA) SUBCOMMITTEE
Per Land Use Code Section 3-720.C.2, the Telluride Housing Authority Subcommittee shall review the independent calculation and forward a recommendation on such matters.
OnSeptember29,2015theTellurideHousingAuthoritySubcommitteeprovided a recommendation of approval with six conditions to the Planning and Zoning Commission on this application as follows:
The independent calculation approval is contingent upon approval of a large scale subdivision and PUD representing a Public Facility deed restricted use on this property and otherwise null and void.
The independent calculation approval is contingent upon Town Council approval of a deed restricted Public Facility with ancillary commercial uses like a café/bar associated with the land dedication approval process before Town Council.
For the purposes of an independent calculation an employee generation rate of 0.5 employees for every 1,000 square feet of net floor area is accepted and replaces the Table #1 generation rate in the Land Use Code.
A Development Agreement shall be memorialized between the property owner and Town with acceptance of such independent calculation and be executed prior to issuance of a building permit for the property.
The Development Agreement will address potential independent calculation for second floor and café uses at the 0.5 level, subject to verification by the Town consistent with the LUC.
The Development Agreement will include a mechanism to verify the independent calculation for all uses, consistent with the LUC.
05 19 2016 independent calc p z transfer warehouse memo 5 of 7
STAFF ANALYSIS
Independent calculations have occurred for commercial uses that are not consistent with the Land Use Code generation rate table. For example, Ace Hardware and Clark’s Market. These are commercial spaces that are primarily occupied by goods, unlike a restaurant, for example, that would likely generate more employees. It is evident from the data provided above, that similar non- profit uses generate 1 FTE per 1,000 square feet, less than the 4.5 FTE assigned in the Land Use Code. The addition unique circumstance is that Telluride Arts notes that they will simply relocate their existing staff into the Transfer Warehouse which would equate to .5 employees for every 1,000 square feet.
As a side note, other non-profits referenced above, like the Ah Haa School and the Telluride Historic Museum, were not subject to the affordable housing mitigation requirements because they moved in to structures that had a similar or more intense use previously. Redevelopment of a pre-existing use or a change of use that is less intensive does not trigger affordable housing mitigation requirements.
The balance when reviewing this request is recognizing that exhibit space similarly does not generate employees at the same rate as other commercial uses like a restaurant. A Public Facility is a public benefit being offered by the overall development application. Absent this public benefit, the underlying zoning would allow for mixed-use comprised of free market residential units, a small commercial space, affordable housing and parking onsite. The applicants represent the existing staff will manage the expanded space which reduces the employee generation rate from 4.5 to .5 per the request. A reduction of the employee generation rate is consistent with its proposed use.
FINDINGS:
That the independent calculation is in conformance with the Land Use Code
That the independent calculation is in conformance with the 2006 Telluride Master
Plan
Housing mitigation net floor area for the purposes of determining final housing
mitigation requirements is determined after HARC approval and prior to Certificate of Occupancy.
STAFF RECOMMENDATION
Should the P & Z find the proposed independent calculation at .5 employees per 1,000 net square feet of floor area acceptable, staff recommends the following motion:
I move to recommend approval of independent calculation per LUC 3-720.C.2 for the Transfer Warehouse parcel at 201 N. Fir associated with the large scale subdivision, large scale PUD and large scale HARC application at 283 N. Fir and 201 N. Fir with the following findings as listed in the memo of record and the following conditions:
1) The independent calculation approval is contingent upon approval of a large scale subdivision and PUD representing a Public Facility deed restricted use on this property and otherwise null and void.
05 19 2016 independent calc p z transfer warehouse memo 6 of 7
2) The independent calculation approval is contingent upon Town Council approval of a deed restricted Public Facility with ancillary commercial uses like a café/bar associated with the land dedication approval process before Town Council.
3) For the purposes of an independent calculation an employee generation rate of .5 employees for every 1,000 square feet of net floor area is accepted and replaces the Table #1 generation rate in the LUC.
4) A Development Agreement shall be memorialized between the property owner and Town with acceptance of such independent calculation and be executed prior to issuance of a building permit for the property.
5) The Development Agreement will address potential independent calculation for second floor and café uses at the 0.5 level, subject to verification by the Town consistent with the LUC
6) The Development Agreement will include a mechanism to verify the independent calculation for all uses, consistent with the LUC.
Optional recommendation:
7) Pursuant to LUC 3-720.C.2.b an Independent payroll audit will be performed two years following the project’s occupancy to determine if the number of employees in the project corresponds with the applicant’s calculation. The Planning Director can refer the findings to the P & Z who could adjust the applicant’s housing requirement in accord with the results of the audit, and the Development Agreement shall be so amended.
/mbh